Correlation Between Phala Network and MNW
Can any of the company-specific risk be diversified away by investing in both Phala Network and MNW at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Phala Network and MNW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phala Network and MNW, you can compare the effects of market volatilities on Phala Network and MNW and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Phala Network with a short position of MNW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phala Network and MNW.
Diversification Opportunities for Phala Network and MNW
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Phala and MNW is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Phala Network and MNW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MNW and Phala Network is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Phala Network are associated (or correlated) with MNW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MNW has no effect on the direction of Phala Network i.e., Phala Network and MNW go up and down completely randomly.
Pair Corralation between Phala Network and MNW
Assuming the 90 days trading horizon Phala Network is expected to generate 13.21 times less return on investment than MNW. But when comparing it to its historical volatility, Phala Network is 6.11 times less risky than MNW. It trades about 0.04 of its potential returns per unit of risk. MNW is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 79.00 in MNW on November 7, 2024 and sell it today you would lose (49.00) from holding MNW or give up 62.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phala Network vs. MNW
Performance |
| Timeline |
| Phala Network |
| MNW |
Phala Network and MNW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phala Network and MNW
The main advantage of trading using opposite Phala Network and MNW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phala Network position performs unexpectedly, MNW can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in MNW will offset losses from the drop in MNW's long position.| Phala Network vs. Staked Ether | Phala Network vs. EigenLayer | Phala Network vs. EOSDAC | Phala Network vs. BLZ |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stocks Directory module to find actively traded stocks across global markets.
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